BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   AB 517|
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                                    CONSENT


          Bill No:  AB 517
          Author:   Hall (D)
          Amended:  As introduced
          Vote:     21

           
           SENATE GOVERNMENTAL ORG. COMMITTEE  :  13-0, 6/28/11
          AYES:  Wright, Anderson, Berryhill, Calderon, Cannella, 
            Corbett, De León, Evans, Hernandez, Padilla, Strickland, 
            Wyland, Yee
           
          SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8
           
          ASSEMBLY FLOOR  :  73-0, 5/2/11 - See last page for vote


           SUBJECT  :    Alcoholic beverages

           SOURCE  :     Author


           DIGEST  :    This bill adds a new provision to the Alcoholic 
          Beverage Control Act that permits wholesalers and 
          manufacturers to accept the return of unsold and unopened 
          beer from an organization that obtained a temporary 
          license.  

           ANALYSIS  :    Existing law permits the return of beer for 
          errors in delivery, health and safety recalls and the 
          identical exchange of out-of-code products.  

          Existing law also authorizes a wholesaler or manufacturer 
          of beer to accept the return of quantities of discontinued 
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          or seasonal brands of beer from a retail licensee, provided 
          that the returned beer is exchanged for a quantity of beer 
          of a brand produced or sold by the same manufacturer with a 
          value not greater than the original sales price to the 
          retail licensee of the returned beer.

          Existing law authorizes the Alcoholic Beverage Control Act 
          (ABC) to issue special licenses for the sale of beer or 
          wine on a temporary basis (usually one to three days) for 
          premises temporarily occupied by the licensee for a picnic, 
          social gathering, or similar occasion at a fee equal to the 
          actual cost of issuing the license, but not to exceed $25 
          per day.  Also, under existing law, ABC may, in its 
          discretion, issue on a temporary basis a daily on-sale 
          general license and the fee for such license shall be $25 
          per day.  

          This bill adds a new provision to ABC that permits 
          wholesalers and manufacturers to accept the return of 
          unsold and unopened beer from an organization that obtained 
          a temporary license.  Specifically, this bill:

          1.  Authorizes an alcoholic beverage wholesaler or 
             manufacturer to accept the return of unsold and unopened 
             beer purchased from that wholesaler or manufacturer by 
             an organization that has obtained a temporary daily 
             license.
              
          2.  Permits the licensee to credit the account of the 
             organization in an amount not to exceed the original 
             sales price of the returned beer, provided that the beer 
             was paid for in full.

          3.  Also, adds clarity to an existing provision of law 
             relating to the reintroduction of discontinued/seasonal 
             brands of beer in the same California market area in 
             which a return and exchange of that beer has taken 
             place.

           Background
           
          According to the author's office, this bill has been 
          introduced on behalf of beer distributors in California who 
          have experienced increasing demands to accept the return of 

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          unsold or unopened beer from nonprofits that are the 
          holders of temporary on-sale licenses (issued for special 
          events, fundraisers, parties, etc.).  Currently, holders of 
          such licenses may choose to keep the unopened and unused 
          beer for a future event for which another temporary license 
          may be issued.  However, they have no legal option to sell 
          or dispose of the beer in their possession at the 
          expiration of their daily license.  This bill permits the 
          return of unsold and unopened beer by daily licensees to 
          the licensee from whom the beer was purchased.  

           Prior/Related Legislation
           
          AB 3071 (Assembly Governmental Organization Committee), 
          Chapter 508, Statutes of 2008, among other things, 
          authorizes beer that is recalled for health or safety 
          issues to be accepted for return at any time from a 
          retailer and be picked up by the seller of beer.  Also, 
          permits the seller of beer to exchange the returned beer 
          for identical product, issue a deferred exchange memorandum 
          showing the beer was picked-up and is to be replaced when 
          inventory is available, or issue a credit to the retailer 
          for the returned beer.  

          SB 1035 (Perata), Chapter 657, Statutes of 2001, allows a 
          person in possession of a stock of lawfully acquired 
          alcoholic beverages following the revocation or voluntary 
          surrender of, or failure to renew, an alcoholic beverage 
          license to sell that stock to licensees, as authorized by 
          the Department of Alcoholic Beverage Control.

          SB 452 (Maddy), Chapter 273, Statutes of 1998, among other 
          things, authorizes a wholesaler or manufacturer of beer to 
          accept the return of discontinued or seasonal brands of 
          beer from a retail licensee, provided that the returned 
          beer is exchanged for a quantity of beer of a brand 
          produced or sold by the same manufacturer with a value not 
          greater than the original sales price to the retail 
          licensee of the returned beer.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

           ASSEMBLY FLOOR  :  73-0, 5/2/11

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          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, 
            Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Campos, Carter, Cedillo, 
            Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, 
            Feuer, Fletcher, Fong, Furutani, Garrick, Gatto, Gordon, 
            Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill, 
            Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, 
            Logue, Bonnie Lowenthal, Ma, Mansoor, Miller, Mitchell, 
            Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, 
            Perea, V. Manuel Pérez, Portantino, Silva, Skinner, 
            Smyth, Solorio, Swanson, Torres, Valadao, Wagner, 
            Wieckowski, Williams, Yamada, John A. Pérez
          NO VOTE RECORDED:  Charles Calderon, Fuentes, Galgiani, 
            Gorell, Roger Hernández, Mendoza, Vacancy

          PQ:kc  8/16/11   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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